Emmi’s Sales Growth on Track But Major Challenges Ahead

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Emmi’s Sales Growth on Track But Major Challenges Ahead

Emmi’s Sales Growth on Track But Major Challenges Ahead
February 06
10:03 2015

Swiss Dairy group Emmi increased net sales by 3.2% to SFr3.404 billion (€3.227 billion) in 2014 to meet its targets. In organic terms (adjusted for acquisition and currency effects) group sales rose by 3.0 % with all product segments of Emmi’s core business making positive contributions. Exports of butter and milk powder in response to the need to reduce the pressure resulting from high milk volumes prompted considerable increases in the dairy products and powder/concentrates segments in the first half of the year. Adjusted for these non-strategic exports, organic growth at group level was 2.5 %, which is in the middle of Emmi’s medium-term forecast of 2% to 3%.

The positive result is attributable to the strengthening of Emmi’s international business and the encouraging performance of the Switzerland business division. Success factors included Emmi Caffè Latte, Kaltbach and other cheese specialities in Switzerland and abroad, as well as various fresh product concepts. The business division Switzerland accounted for 55 % of group sales down from 56% in the previous year.

EmmiKaltbachGruyereIn Switzerland, the company focuses on the development, production and marketing of a full range of dairy and fresh products as well as the production, ageing and trade of primarily Swiss cheeses. Outside Switzerland, Emmi concentrates on brand concepts and specialities in European and North American markets. The primary focus in fresh products is on lifestyle, convenience and health products. In the cheese business, Emmi positions itself as the leading company worldwide for Swiss cheese. Emmi’s customers are the retail trade, the hospitality and food service sector and the food industry.

However, like other exporting companies in Switzerland, Emmi is negatively impacted by the strength of the Swiss franc. The weak Euro affects roughly SFr400 million of export sales. Emmi has put together a package of measures to address this issue. This includes price increases for export products, additional efficiency programmes at facility level, price cuts for milk processed for export products and price negotiations with international suppliers. Emmi is doing everything in its power to ensure that Swiss dairy products continue to have sufficient sales potential in international markets. Nevertheless, currency effects will have a negative impact on Emmi’s sales performance. Given the various measures it has put in place, however, the company is highly confident that its 2015 net profit will still be within the margins of the medium-term guidance of 2.5% to 3.5%.

Emmi will announce its forecast for sales and net profit in 2015 when the figures for financial year 2014 are published.

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